A single Netflix show became the foundation for one of 2021’s largest cryptocurrency scams, resulting in $3.3 million stolen from investors.
When Squid Game became Netflix’s most-watched series in September 2021, scammers quickly created the Squid Game Token (SQUID), using the show’s popularity to lure unsuspecting investors.
Within just three months, they orchestrated a complete theft of user funds through a carefully planned “rug pull” scheme.
The scam happened from October 20 to November 1, 2021, following a pattern that mixed social psychology with technical deception.
Starting with promises of a play-to-earn game based on the show’s theme, the token’s price rose from pennies to $2,860 before crashing to zero in minutes. The scammers disappeared with millions, leaving investors unable to withdraw their funds and authorities unable to track the perpetrators.
Scammers Built the Perfect Squid Game Trap
According to crypto analyst Roger Wang’s detailed investigation, the scammers timed their scheme perfectly. One month after Squid Game’s release, they launched their token with promises of a play-to-earn game where players could earn cryptocurrency by competing in games inspired by the show.
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The timing capitalized on peak public interest, when the series dominated social media conversations worldwide.
Wang explains how the scammers created artificial demand through a multi-step process. They first promised that token holders could participate in an online gaming platform mirroring the show’s competitions.
Players would supposedly earn more tokens through gameplay, which they could then exchange for real money. The price responded dramatically to these promises, rising 1,000% in the first week.
The media coverage amplified the scheme’s reach. Headlines about the token’s price increase drew more investors, creating what Wang calls “a self-fulfilling cycle of hype.” Social media buzzed with predictions of SQUID reaching $1.00, driving more buyers into what would become a trap.
The scammers had created perfect conditions: a popular theme, seemingly legitimate gaming plans, and rapidly rising prices that made early investors appear successful.
Red flags and Manipulation Tactics
Roger Wang points out several warning signs that many investors missed during the height of SQUID’s popularity. First, the project had no connection to Netflix or the show’s creators, though its marketing materials implied an official relationship.
The project’s website contained basic grammatical errors, which Wang notes typically indicates a hastily assembled scam operation.
The most telling red flag appeared in the token’s mechanics: investors could buy SQUID, but couldn’t sell it. Wang explains how the scammers created an elaborate excuse for this restriction through a system they called “marbles.”
To cash out their SQUID tokens, investors needed to purchase additional tokens called marbles. This requirement forced investors to put more money into the system, even as they couldn’t withdraw their initial investment.
The psychological manipulation grew more complex over time. When critics began calling SQUID a Ponzi scheme, the creators defended their marble system as a game feature, playing into the Squid Game theme.
Wang describes how this response actually worked in the scammers’ favor – it made the restriction seem legitimate and game-like rather than suspicious. Even after buying marbles, investors still couldn’t access their funds, trapping them in an endless cycle of purchases.
The Collapse and Lessons Learned
The scam reached its peak on November 1, 2021, when the SQUID token price hit $2,860. Wang details how this moment marked the scammers’ exit – in a matter of minutes, they deleted all social media accounts, shut down their website, and disappeared with $3.3 million of investor funds.
The token price crashed to zero, leaving investors with worthless holdings and no way to recover their money.
Wang breaks down why this scam worked so effectively. The creators exploited the fear of missing out (FOMO) by connecting their token to one of the most popular shows in Netflix history.
They built artificial urgency through price increases, making potential investors worry they might miss life-changing returns. The scammers remained anonymous throughout, making it impossible for authorities to track them after the rug pull.
The lessons from this scam extend beyond crypto trading, Wang explains. First, cultural excitement can override basic due diligence – investors ignored clear warning signs because they wanted to believe in the project’s connection to Squid Game.
Second, restricted selling ability should always raise alarms, regardless of the explanation provided. Third, anonymous teams promoting investment opportunities deserve extra scrutiny.
